CMS Pub. 100-08, ch. 3, § 3.7.1.2

This section applies to MACs.

The following vignettes provide guidance on how the MACs shall characterize and

respond to varying levels of confirmed errors. These are examples of results from

medical review accompanied by suggested corrective actions. This information should

only be used as a guide and is not meant to be a comprehensive list of vignettes nor an

inclusive list of administrative actions. The MAC MR department shall include

communication and follow-up with provider outreach and education (POE) throughout

the PCA process to coordinate efforts toward problem resolution. The MACs shall

monitor trends indicating widespread educational need and shall ensure that POE staff

has access to copies of all MR provider notification and feedback letters so they are

prepared for provider requests for education (See IOM Pub. 100-04, chapter 20, §3.4.2,

for further information).

1. Twenty claims from one provider are reviewed. Once claim is denied because a

physician signature is lacking on the plan of care. The denial reflects 7 percent of

the dollar amount of claims reviewed. Judicious assessment of medical review

resources indicates no further review is necessary at this time. The MAC uses

data analysis to determine where to target medical review activities in the future.

2. Forty claims from one provider are reviewed. Twenty claims are for services

determined to be not reasonable and necessary. These denials reflect 50 percent

of the dollar amount of claims reviewed. One hundred percent prepayment

review is initiated due to the high number of claims denied and the high dollar

amount denied. The MAC provides notification to the provider about specific

errors made and makes a priority referral to POE to inform them of the severity of

the problem.

3. Forty claims from one provider are reviewed. Thirty-five claims are denied.

These denials reflect 70 percent of the dollar amount of claims reviewed.

Payment suspension is initiated due to the high denial percentage and the

Medicare dollars at risk. The MAC provides notification to the provider about the

specific errors made and makes a priority referral to POE to inform them of the

severity of the problem.

4. Forty claims from one provider are reviewed. Thirty-three claims are denied.

These denials reflect 25 percent of the dollar amount of the claims reviewed. The

MAC provides notification to the provider about the specific errors made. The

MAC initiates a moderate amount (e.g., 30 percent) of prepayment medical

review to ensure proper billing.

5. Thirty-five claims from one provider are reviewed. Thirty claims are denied

representing 75 percent of the dollar amount of the claims reviewed. Many of the

denials represent services provided to beneficiaries who did not meet the

Medicare eligibility requirements. The MAC provides notification to the provider

about specific errors made and makes a priority referral to POE to inform them of

the severity of the problem. A consent settlement offer is made but declined by

the provider. A postpayment review of statistical sampling for overpayment

estimation is performed and an overpayment is projected to the universe of similar

claims from the provider. Overpayment collection is initiated.

6. Twenty-five claims from one supplier are reviewed. Five claims representing 5

percent of the dollar amount of the claims are denied. This supplier is known to

the DME MAC as one who has a significant decrease in billing volume when

targeted medical review is initiated. The DME MAC is concerned that this

supplier may be selectively submitting bills when placed on medical review and

chooses to continue some level of prepayment medical review despite the low

error rate.

7. Twenty claims from one provider are reviewed. Ten claims are denied for

incomplete physician orders representing 65 percent of the dollar amount of the

claims. The MAC issues a letter to inform the home health agency (HHA) about

the denials and the reason for the denials. In response to the notification letter,

the agency owner initiated a mandatory training program for select staff. The

HHA was put on 30 percent prepayment medical review. Results of the review

indicated an improvement in the error rate to 30 percent (based on dollars denied

divided by dollars reviewed). On appeal, most of the denials were overturned.

The MAC consults with the ALJ to understand why the cases are being

overturned and consults with the RO on appropriate next steps.